Microsoft Exits UK Data Center Project, Adding Further Uncertainty to Nscale's IPO Plans

On October 18, citing The Daily Telegraph, Microsoft (MSFT.O) has withdrawn from its data center partnership project in Loughton, Essex, UK, with emerging British cloud service provider Nscale. This move comes at a critical period as Nscale prepares for its IPO, adding uncertainty to the startup's listing plans. The report states that Microsoft did not disclose the specific reasons for terminating the partnership, but the project has faced a series of delays. Local authorities have informed Nscale that electricity supply to the facility is not expected until the 2030s.

Additionally, Nscale's flagship project in Norway is also about six months behind schedule, with only 6.4 megawatts of the planned 30-megawatt data center currently operational. According to Nscale's IPO filings, approximately 85% of the company's contracts depend on Microsoft and Anthropic. Microsoft was originally slated to be the primary tenant for Nscale's first UK data center in Essex. Microsoft's exit will deliver a blow to Nscale. The company is seeking to raise up to $3 billion through an IPO, potentially listing as early as this month.

Previously reported, Nscale plans to proceed with its IPO as early as this month, yet its actual operational capacity remains under 1% while facing multiple operational challenges.